Welcome to The Accelerated Investor Podcast with Josh Cantwell, if you love entrepreneurship and investing in real estate then you are in the right place. Josh is the CEO of Freeland Ventures Real Estate Private Equity and has personally invested in well over 500 properties all across the country. He’s also made hundreds of private lender loans and owns over 1,000 units of apartments. Josh is an expert at raising private money for deals and he prides himself on never having had a boss in his entire adult life. Josh and his team also mentor investors and entrepreneurs from all over the world. He doesn’t dream about doing deals, he actually does them and so do his listeners and students. Now sit back, listen, learn, and accelerate your business, your life, and your investing with The Accelerated Investor Podcast.

So, hey, guys, welcome back to Accelerated Investor. Hey, this is Josh. And in this solo cast, I’m going to describe for you this brand new 80-unit apartment building that we just bought. But I’m going to specifically dial in to what are the six main divisions or departments for you to grow in, scale your rental portfolio. I’m going to walk you through the six main divisions, main departments of my business and who’s responsible for each department, including the departments I’m responsible for. And what is the job description of each department within your business so that each person can kind of divide and conquer? 

Everybody knows what they’re responsible for, what their swim lanes are. And so you can grow and build a really scalable management team, a really scalable portfolio, where you’re not just ripping your hair out like, you know, a bat out of hell with your hair on fire, trying to do everything by yourself. So in this podcast, if you’re looking to build a cleaner, better management system for how you’re going to handle your rental properties, your rehabs and your commercial apartment buildings, you’re going to love this discussion. This solo cast, just me, describing the six main divisions or departments of my commercial apartment portfolio. Take a listen. I hope you enjoy it. 

Hey, guys, what’s going on? Hey, Josh Cantwell here, welcome back to Accelerated Investor. And listen, I just actually just sat down in my home office. We did get rid of our corporate office. I just sat down in front of my computer and I wanted to really shoot this quick podcast in this quick video for you guys. I just left an 80-unit apartment building that we just bought. We now have over 2700 units of apartments. And this is on my mind, this topic. And so I want to just quickly debrief and talk to you about it. And so the title of this is basically divide and conquer. 

And what I mean by that is as you grow your real estate investing business, whether it’s commercial or residential, whether it’s apartments or single-family homes, you’ve got to divide and conquer in your business in order to scale. And so what I want to talk about with you today is the six divisions or the six departments that we use in our business to grow a massive portfolio and to be able to scale that business without ripping my hair out. OK. 

So the six departments or divisions, whether it’s residential or commercial, whether it’s residential, single family homes, one to four units or it’s apartments, looks like this. We have one department or division that does nothing but raise capital. We have a second department or division that does nothing but property acquisitions. We have another department or division that does capital improvements or capex, whether it’s rehabbing for single family homes and rentals, or whether it’s capital improvements for commercial properties and apartments. The fourth division is management and maintenance, OK, which includes leasing and regular tenant inquiries. The fifth department or division is budgets and projections. OK. Lot of forecasting. And then the last division is the books and the cash. The accounting. OK. 

So let me talk about each one of these divisions for a minute and how we broke up our business. And I’m gonna use this recent case study. We just bought an 80-unit apartment building. We just bought a 16-unit apartment building. We just bought 18 units of single-family homes, which are actually not single families or duplexes. They’re Quad’s, you know, they’re two bedrooms, three bedrooms, four doors. And so we just bought in the last really four or five months, we just bought one hundred and eighteen units. We’ve also got a 96 unit that we’re offering. We’ve got a 15 52 unit that we’re offering on. We also just had five hundred and thirty units that hit my desk in the last 48 hours. I just want to see hundred fifty-five unit that we’re gonna offer on. We just offered on one hundred twelve unit. 

So when you look at it like there’s no way I could manage a thousand units by myself, we now own over two thousand seven hundred units of apartments. So the question is, well, how do you do that if you’re a new investor or maybe you have 50 units or a hundred units and you want to scale to a thousand units or 3000 units or more? How do you do that? OK. So you break it down into these six divisions, which I just mentioned. Let me talk a little bit deeper about each division and how you need to break up your business. 

Now, the reason why I love commercial apartments and, you know, even single-family rentals, but at scale large, large numbers is because the numbers are big enough that they allow us to hire multiple people and each person gets to be the expert in their department. The expert in their division. 

OK. So let me start with cap raise. So cap raise, to me, this is I’m the lead on cap raise. OK. Which means my job in that department, not only as the CEO and majority owner of my companies, but also my job is to raise money, to build relationships and to build marketing and sales funnels that bring in new capital raise leads, people that want to invest in our deals. 

OK, to build a funnel, to build an automated sequence that allows people to opt in. And then when they opt in, they get an automated sequence of emails, text messages and videos. That builds the relationships for me while I’m sleeping or while I’m at the beach. It also includes what we call we use a program called Profit Pro, which means that’s where we all of our investors opt in. And when they opt in, they get to see the back office where they get to see our deal flow. So the front end sales and marketing acquisition of new passive investors falls in the cap raise category. It also includes the updates. So it also includes our quarterly payouts, our quarterly newsletters, our quarterly updates to investors are quarterly new pictures, new photos, new videos. That’s another sort of bucket that’s in this cap raise division or department. 

Then, of course, working with our legal department to do the private placement memorandum, editing the private placement memorandum, making sure that everything is included in their subscription agreements, the operating agreements or everything that goes into the legal side of raising money, making sure that we have our 506B or 506C. And then, of course, our cap raise webinars. So it includes the email copy. To invite investors to our webinars. It includes the headline and the landing page where people register for our cap raise webinars. And that actually includes the actual deck, the PowerPoint deck, to pitch our deals. 

OK. So by splitting this up into divisions or departments, it allows me to own the cap raise division. Now, we also have a support team. A support team includes my other staff, my other team, my other partners who helped me in this department. So this includes Glenn Lytle, my business partner. Includes Jen Pennington, my director of operations. Includes Roberto Flanders, my CFO, and it includes our securities attorneys. OK, so that’s the first division or department, the cap raise department. We’ve got to raise capital. We’ve got to manage the capital. We have to make it a good experience for investors. 

Number two, let’s move to the second department. The second division, second department, second division is the property acquisitions. Now, in this department, our lead in my business is my partner, Tyler Bromet. Tyler is on a daily basis looking at deal flow, talking to brokers. He’s responsible for procuring new property acquisitions case. Let’s talk about some of the responsibilities. If he’s the lead of Tyler’s, the lead of that division or that department. What are his responsibilities? Will includes broker relationships with both residential and commercial brokers. It includes relationships with wholesalers. It includes looking for deals that are maybe even on the market. Could be the MLS. It could be auction.com. It could be Zillow. It could be home path. Home steps. It could be auction.com. It could be Hub Zoo. It could be commercial brokers, could be LoopNet. All these different places that you can go find deals. 

That also would include direct mail, Web sites, door knocking, cold calling, all these various things that go into property acquisitions. Now, again, my business is focused on today a value-add multi-family deals. So we wholesale for quick cash. But we also buy and hold. For big profits, that’s what I’m most excited about, is big profit deals like the 80 unit I just left. We’re all into that for four point four million. It could be worth six point two million by the time we’re done with our value, add improvements and raising the rents. So, Tyler, as the lead of the property acquisitions division is awesome. So he’s responsible for all the acquisitions, but he’s also responsible for broker relationships with multiple different commercial brokers and residential brokers. He’s responsible for revaluating deals and submitting letters of intent, making offers, the due diligence to make the proper offer. 

So working with our lender to evaluate a deal, to look at things like costar, to look at our deal evaluation tools using accelerated investor office for a residential deals, he’s also responsible for lender relationships to see which lender will help us close that transaction. He’s responsible for making sure we secure insurance. He’s also responsible for writing the purchase and sales agreement, negotiating the purchase and sales agreement. And then once we have the property under contract, acquiring all of the due diligence documents. So rent rolls, historic cash flow analysis, profit and loss statements, income statements, all those different kinds of things, and then getting an inspection done. So commercial inspections, residential inspections or due diligence inspections, getting through the due diligence period. Okay, he’s also responsible for earnest money. 

Now, the earnest money is raised during the cap raise, which is my department, and then Tyler is responsible for deploying the earnest money. That’s the second division is property acquisitions now in my business again. Tyler takes the lead on procuring deals. I backup Tyler. I’m very involved in property acquisitions, actually, this week on Monday. I was down in the Columbus and Cincinnati markets looking at one hundred and fifty-five unit. We just went to see a 52 unit were about to go look at a 96 unit. You know, we look at properties every single week. So Tyler’s the lead. I’m his backup support. And so was my partner, Glenn, a backup. 

Then you move to the next division, which we talked about earlier, which is Cap ex, which is your this is your rehab department. This is the department that handles your capital improvements, whether it’s rehabs on small single family or duplexes requires or its large capital improvements, large apartment buildings. So in this department, the lead in our are our business. His name is Tim Roth. And Tim is our senior rehab project manager. OK. 

So Tim is responsible for everything from pricing, buying, contractor relationships, subcontractor relationships, budgeting, scheduling, ordering materials, staging materials, doing full unit turns, you know, bringing in general contractors, subcontractors, making sure that they’re on the job there on time, they’re on budget, making sure, again, if you’re turning over an 80 unit apartment building like we are, you’ve got to have a plan in advance for how you’re going to manage every like 30 days. So we know as a record this is late October 20, 20 in November and December. We have a plan to turn seven units. OK. We have Thanksgiving. We have Christmas. So we’re going to run up against vacation time and people out with the holidays. 

OK, so we’re going to turn seven units. We know exactly which seven doors, the exact unit numbers we want to turn over the next 60 days. We know if they’re two bedrooms, three bedrooms or one bedrooms, we know the square footage and we have a budget for each unit. OK. We know exactly how much square footage we’re turning. And what’s the budget? Then we have another plan for January in February. In January. February, we have a eleven one bedroom, one bath properties. OK, one bed one bath properties that are a little bit smaller than 500 square feet. And so eleven of those is about fifty five hundred square feet. And the budget for that eleven is about eighty thousand dollars. It’s about seventy-five hundred dollars per unit times 11 units. So. We’ve got a plan for January, February, which units were turning? What’s the budget per unit? What’s the square footage? And then the contractors know when we’re going to need them. 

Then we’ve got another plan for March and April. OK. So we have a lead on that, which is Tim. Now, the backup to Tim is Tyler. Tyler handled property acquisitions. Tyler is very familiar with capital improvements. Tyler obviously owns a lot of units, lot of units on his own, lot of units with me as a partner. So Tyler’s is backup. Then we’ve got of course, we’ve got our onsite ten ninety-nine our onsite guys that support Tim. They’re full time employees of ours, are full time, basically guys that work for us full time and they’re available on the job every day. So that’s the 3rd Division of the 3rd Department, which is CapEx. 

You notice how we have a lead and then we have a support team for each department or division. The fourth is once the capital improvements are done now, we’re gonna put the unit in service. OK, in-service. And once the units in service, that means it’s for rent. It’s been improved. It’s got all new cabinets, countertops, appliances, flooring, paint, et cetera, et cetera, et cetera. Now it’s ready to be leased. Case or fourth department or division is management and maintenance. OK. This is actually led by Vanessa. Vanessa is responsible for taking the lead on leasing every unit and maintaining every unit. OK. So she’s responsible for tenant management. She’s responsible for making sure the common spaces look clean. They’re painted. She’s responsible for collections, evictions, any kind of utility, turnover’s, water and sewer. She’s responsible for tenant turnovers. 

We use a program called Buildium, a software program called Buildium, where all the tenants can go online and they can make their payments online. And in building them, they can make their payment online. They can also submit a tenant inquiry if anything needs to be fixed in their unit. OK. Vanessa’s also responsible for operations like the Internet, access, phone access, security access, the security cameras and the laundry. OK, laundry, income. She’s responsible for all that. That all falls under management and maintenance. 

OK, now Vanessa has a support team. OK. She’s got Leonard, who’s our time maintenance guy. She’s got a guy named Roy who is a part time maintenance guy. That’s kind of there whenever we need him. Vanessa also has access to our attorney who handles evictions and she’s got another maintenance guy at one of our other properties. You know, that that kind of services our properties and in the Akron Canton market because we own a lot of properties in the Cleveland market. Then we have a bunch of properties in Akron, Kenton Market. OK. So she’s got a maintenance team in the Cleveland area. She’s got a maintenance and management team in the Akron Canton area. So that’s the fourth division. 

The Fifth Division is budgets and projections. OK. So now you’ve got to have somebody who is really good at looking at numbers. This is my partner, Glenn Lytle. And that person is responsible for looking at the original proforma. When we look at a property that we get do a proforma, we get the numbers, we get the income statements, the rent rolls, the expenses from the seller. We put that into a current pro forma, like, what does things look like today? What’s the current income? What’s the current expenses? Then you look at, OK, what should the building be operating it today, without doing any capital improvements, it was just operating at proforma based on the current status of the building, the current look and feel of the building. What should things be renting for? 

Then we have a second pro forma that shows after the capital improvements are done. What should the units be rented out for? Let’s say they should be above the rents by one hundred two hundred dollars per month per unit. What does that look like? So Glen handles a lot of our forecasting, looks at the rent rolls, looks at the unit mix and says, hey, we could bump the one bedroom, one back by one hundred and forty dollars. We could bump the two bed, one bath by fifty-five dollars. We can bump the three bed, one bath by, you know, one hundred and fifty dollars. 

And we look at those numbers and we say, OK, where is the biggest value? Where is the biggest bang for your buck? So on this 80 unit deal, what we decided was the biggest rental increase opportunity was in the one bed, one bath. So we I spend most of our money there after the one by one bath. The next biggest increase in rent is the three bed. One bath. Then the least amount that the unit mix that has the least amount of potential rental increase is the two bed, one bath. So we’re going to hit those last. OK. 

So when you have somebody responsible for that Fifth Division, which is budgets and projections, they can do forecasting, they can look at the actual income statements, the actual revenues, the actual expenses, and compare those against where do we need to be. And then finally, budget, your department number six is the actual accounting, the actual accounting, because when you own an 80 unit apartment building, you own another 16 unit, then, you know, own another sixteen unit, then another hundred sixty four unit that are 492 unit. Then a seven hundred and thirty unit. You own all these apartments. Someone has to be looking at the PNL, the balance sheet, the rent rolls, the tax returns, making sure that the investor payments go out on time, making sure if you collect, like we collect all of our rents instead of Buildium, and then we export all the income in the expenses out of building them and put them into quick books so that quick books can be given to the CPA so the CPA can do the year-end tax returns. OK. 

So the actual day to day accounting, the day to day books needs to be done by a separate person that does nothing, but that could be a bookkeeper. For us, it’s our CFO whose name is Roberto Flanders. And so Roberto takes the lead on that. And his backup is Hank, who is our CPA. And Glen. So Glen does the budgets and projections. But then Glen also is the backup to Roberto to look at the actual books, look at building and look at quick books and making sure we’re recognizing all the expenses in the proper categories. We’re recognizing all the of all the income in the proper categories and making sure that the actual accounting, the accounting is gonna tell us a story about how the building is performing. 

OK, so Department of Division one: cap raise. I’m the lead on that. Property acquisitions, that’s number two. Tyler’s the lead on that. Number three division is Cap ex. Tim is the lead on that. Management and maintenance: vanessa’s the lead on that. Budgets and projections: Glenn is the lead on that. And the accounting: Roberto’s the lead on that. 

Notice that nobody has on my team. None of us have more than one department or division. Now, we might be in a support role in other departments, in divisions. So I’m in a support role for budgets and projections. I’m in a support role for CapEx. I’m in a support role for property acquisitions. But what I’m a hundred percent responsible for is Capri’s is raising capital from private investors for our deals. OK. Glenn might be the lead on budgets and projections. But Glenn also helps with cap raise. Glenn also helps of property acquisitions. Glenn also might help with the books in the accounting, but he has one department or one division where he’s the lead. 

Now, what this has allowed us to do as we acquire more buildings and acquire more properties is each person’s gotten really good at their department, their division. But they also know that they have a backup in who they can go to for backup. OK. So as you build out your business, whether it’s, again, a big single family rental portfolio, one to four units or whether it’s a large commercial apartment portfolio, I would highly encourage you to think about those different departments and divisions and. What people are responsible for and how you can rip off and duplicate what I just described in your own business. 

So, hey, guys, I hope you enjoyed that discussion about the six main divisions or departments of our commercial apartment portfolio. It’s really helped me be able to build a nice, pretty large, pretty impressive portfolio, frankly, without having to rip my hair out, without having to work 80 hours a week without losing sleep. I hope you enjoyed that if you did. Please go into wherever you check out your i-tunes, wherever you check out your podcasts. I meant to say wherever you check out your podcasts, including I tunes, and leave us a five-star rating in review. 

If you see this on YouTube, you see this on video. Leave us a thumbs up. Make sure you hit the red subscribe button. Makes you subscribe on YouTube. So every single time we release another video or another podcast that you’re notified and you don’t miss out on any of this amazing content that we’re releasing. Also, if you’re looking to build a bigger, better portfolio, go visit JoshCantwellCoaching.com and opt in for a free one on one strategy session so we can work with you and find out what your goals are, whether it’s single family rehabs, whether it’s single family rentals, whether it’s wholesaling or building a large commercial apartment portfolio. We can help you do that through our one on one coaching programs. 

Go visit JoshCantwellCoaching.com. Gather more information, guys. It’s free to apply. It’s free to learn more. So you’d be crazy not to take us up on that free 15 to 30 minute Strategy Session. JoshCantwellCoaching.com. Don’t forget. Hope you enjoyed this episode. Make sure you subscribe to catch all future episodes wherever you check out your podcast, wherever you get your videos. Make sure you subscribe so you don’t miss out on the next one. We’ll see you next time. Take care. 

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You’ve been listening to Josh Cantwell and the Accelerated Investor Podcast. Leave a comment on our iTunes channel and let us know what you want to learn next, or who you’d like Josh to interview. While you’re there, give us some five-star rating and make sure to subscribe so you can be the first to hear new episodes. Follow Josh Cantwell and his companies, the Strategic Real Estate Coach and Freeland Ventures on all social media platforms now and stay up to date on new training and investment opportunities to start your journey toward the lifestyle you’ve always dreamed of. Apply for coaching at JoshCantwellCoaching.com.